1. SCHOOL OF BUSINESS ADMINISTRATION TECHNOLOGY COMMERCIALIZATION PROGRAM Welcome to Business Strategy and Policy John A. Hengeveld week 2 tuesday

2. SCHOOL OF BUSINESS ADMINISTRATION TECHNOLOGY COMMERCIALIZATION PROGRAM AGENDA Kitty Hawk Case Core Competency Article Innovators Solution, ch 3-5 Brown&Eisenhart ch 1-3

3. SCHOOL OF BUSINESS ADMINISTRATION TECHNOLOGY COMMERCIALIZATION PROGRAM Kitty Hawk What went wrong with Kitty Hawk??

4. SCHOOL OF BUSINESS ADMINISTRATION TECHNOLOGY COMMERCIALIZATION PROGRAM Kitty Hawk viewed by Innovators Solution What type of innovation was Kitty Hawk? What architecture? What type of product definition research?

5. SCHOOL OF BUSINESS ADMINISTRATION TECHNOLOGY COMMERCIALIZATION PROGRAM Congruence Model – Kittyhawk Formal Outputs Balanced ScoreCard: Financial What real expectations should there be? CUSTOMER Internal How are traditional DMD customers served? Learning and Growth What is the learning plan for the group? Environment Resources History Formal Organization Strong Resource Commitment Informal Organization - Technical Excellence Customer Needs Passion People Best of the best Heavyweight Team Strategy Critical Tasks - $50 dumb drive Find new markets Learn and Grow

6. SCHOOL OF BUSINESS ADMINISTRATION TECHNOLOGY COMMERCIALIZATION PROGRAM The rest of DMD Formal Outputs Balanced ScoreCard: Financial CUSTOMER Internal Learning and Growth Environment Resources History Formal Organization Resource Allocation Issues Strong Sust Innov Processes Informal Organization Strong culture of innovation Strong culture of customer commitment People Rest of the best Key innovators out Strategy Critical Tasks -Maintain competitive technology Be performance leader for HP solutions Keep OEM relationship strong

7. SCHOOL OF BUSINESS ADMINISTRATION TECHNOLOGY COMMERCIALIZATION PROGRAM Technology Cycles Rate of Innovation Time Product innovation Process Innovation Substitution Event DD

8. SCHOOL OF BUSINESS ADMINISTRATION TECHNOLOGY COMMERCIALIZATION PROGRAM Types of Innovation and Innovation Streams T&O, Winning Through Innovation, figure 7.3 Inexpensive Mechanical Watch Smaller, Thinner Mechanical Watches Swatch Continuous Aim gunfire First Watch Quartz Watch New Existing Markets Incremental Small Extensions of Existing Technology Architectural Reconfigures Existing Technology Discontinuous New operating principles in Core Subsystems&/or Discontinuous Process innovation

9. SCHOOL OF BUSINESS ADMINISTRATION TECHNOLOGY COMMERCIALIZATION PROGRAM Organizational Cycles The success syndrome FIT SUCCESS Size and Age Inertia: Structural Cultural Success in Stable Markets Failure in Market Shifts

10. SCHOOL OF BUSINESS ADMINISTRATION TECHNOLOGY COMMERCIALIZATION PROGRAM How did executive team perform? Executive Team Provide Clear, Simple Vision Balance Multiple Architectures Makes Bets on Shifting Innovation Manage Ambidextrously Today/Tomorrow Large/Small – Incremental/Discontinuous Inc Culture Promoting Continuous Improvement Incremental Change Eliminate Variability Reward Volume & Cost Arch Culture Promoting Linkage Across Units Adding and Linking Subsystems Reward Integration Disc Culture Promoting Breakthroughs Many Small Failures Learn by Doing Reward Experimentation and Innovation

11. SCHOOL OF BUSINESS ADMINISTRATION TECHNOLOGY COMMERCIALIZATION PROGRAM Kitty Hawk Viewed by Brown and Eisenhart

12. SCHOOL OF BUSINESS ADMINISTRATION TECHNOLOGY COMMERCIALIZATION PROGRAM Innovators Solution Key Points Ch 3-5

13. SCHOOL OF BUSINESS ADMINISTRATION TECHNOLOGY COMMERCIALIZATION PROGRAM IS: Ch 3 The view of market segmentation analysis is central to the failure of disruptive technologies, or the vunerability to disruption of core businesses. Table 3-1 in the book

14. SCHOOL OF BUSINESS ADMINISTRATION TECHNOLOGY COMMERCIALIZATION PROGRAM Extracting Growth from Non Consumption Target customers are trying to get a job done but.. They lack a simple inexpensive solution Customer compares disruptor with no solution at all.. Easy performance hurdle Deploy technology to make it foolproof Create a whole new value network (whole product)

15. SCHOOL OF BUSINESS ADMINISTRATION TECHNOLOGY COMMERCIALIZATION PROGRAM IS F 4-3 High Commitment Rigid Plan High Commitment Flexible Plan Low Commitment Rigid Plan Low Commitment Flexible Plan Framing in the Venture Building Process Opportunity Threat Framing in the Resource Allocation Process Threat Opportunity

16. SCHOOL OF BUSINESS ADMINISTRATION TECHNOLOGY COMMERCIALIZATION PROGRAM IS f Ch5-1 Time Performance Interdependent Architectures, Integrated Companies Modular Architectures, Nonintegrated companies Range f Solutions Customers Can Utilize Beat competitors with functionality And reliability Beat competitors with speed responsiveness And convenience

17. SCHOOL OF BUSINESS ADMINISTRATION TECHNOLOGY COMMERCIALIZATION PROGRAM IS Ch 8 Points of Executive Leverage in Strategy Making Process –Carefully control initial cost structure –Actively accelerate the process of finding a viable strategy – discovery driven planning –Personally drive the balancing

18. SCHOOL OF BUSINESS ADMINISTRATION TECHNOLOGY COMMERCIALIZATION PROGRAM Deliberate Planning Make assumptions about the future Define a strategy based on those assumptions and make financial projections Make decisions to invest based on financial projections Implement strategy to achieve financial results.

19. SCHOOL OF BUSINESS ADMINISTRATION TECHNOLOGY COMMERCIALIZATION PROGRAM Discovery Driven Planning Make targeted financial projections What assumptions must be true in order for these projections to work? Implement a plan to learn- test critical assumptions and remove barriers which emerge Invest to implement the strategy

20. SCHOOL OF BUSINESS ADMINISTRATION TECHNOLOGY COMMERCIALIZATION PROGRAM B&E Improvisation Survey No Rules……………………Many Rules Followed……………………Ignored Undefined…………………..Lockstep Expected……………………Problematic Targeted…………………….Distributed Widely End Products………………..Processes Clear………………………...Ambiguous Always……………………Never Constant……………………Infrequent Channeled…………………Chaotic There are: Rules are to be: Processes are: Change is: Responsibility is: Focus is on: Priorities are:.. they drive Resource Communication is:

21. SCHOOL OF BUSINESS ADMINISTRATION TECHNOLOGY COMMERCIALIZATION PROGRAM B&E Coadaptation Frequent…………………Rare Corporate…………………LowLevel Clear………………..Undefined Team play…………………Individual Win Common…………………Rare X-Business collab is:.. Decisions are made: Roles of different bus: The Culture rewards: Reinventing the wheel:

22. SCHOOL OF BUSINESS ADMINISTRATION TECHNOLOGY COMMERCIALIZATION PROGRAM B&E Five ForcesCore Competence Game Theory Competing On the Edge AssumptionsStable Industry Firm as bundle of competences Dynamic Oligopoly Industry in Rapid change GoalDefensible position Sustainable advantage Temporary advantage Continuous Flow of adv. Performance Driver Industry structure Unique competencies Right Moves Ability To change StrategyPick Industry Pick position Shape firm Craft vision Build competencies to match Make the right Competitive & Collaborative moves Gain the edge: Time pace, shape semicoherent, Strat. direction SuccessProfitsLong Term Dominance Short Term Wins Continual Reinvention

23. SCHOOL OF BUSINESS ADMINISTRATION TECHNOLOGY COMMERCIALIZATION PROGRAM B&E Chapter 1 Playing the Improvisational Edge Capturing Cross-Business Synergies -Coadaptation Gaining Advantages from the Past -Regeneration Winning Tomorrow Today -options -learning Setting the Pace -time pacing Time Pacing Edge of Time Edge of Chaos

24. SCHOOL OF BUSINESS ADMINISTRATION TECHNOLOGY COMMERCIALIZATION PROGRAM Core Competency Article Frequently misquoted and mispurposed Why? What is the essential theme shown here?